[SMM Analysis] Market Confidence Rises, Boosting Transactions, Stainless Steel Social Inventory Further Declines

SMM reported on December 31 that this week (December 26-31, 2025), the total inventory in Wuxi and Foshan, the two major stainless steel markets, showed a declining trend, falling from 892,400 mt on December 25, 2025, to 872,600 mt on December 31, down 2.22% WoW.

This week, stainless steel social inventory continued to decline. Affected by the ongoing news that nickel mine approvals in Indonesia may tighten, SS futures continued to strengthen, significantly boosting market confidence, and spot quotations followed the upward trend. Although cautious wait-and-see sentiment persists downstream in the market during the year-end off-season, with limited acceptance of high-priced supplies, the previous prolonged weakness in the stainless steel market suppressed purchasing demand. Coupled with recent futures boosting spot prices to rise successively, the release of the "rush to buy amid continuous price rise and hold back amid price downturn" sentiment, and traders offering discounts, transactions recovered compared to the previous period. Meanwhile, the decline in stainless steel production and supply contraction in December further drove the continuous decline in stainless steel social inventory. However, the rising production schedule of stainless steel mills in January is expected to bring an increase in supply, while downstream demand has not fundamentally improved in the current off-season. The market is significantly influenced by news and futures, and transactions and prices still face considerable risks of a pullback.